The daily respondent’s lists from The Master’s offices in Johannesburg, Pretoria Cape Town is published on this web site the following day.

View the restoration of corporate value at different levels of company health.

Liquidation industry

In 2004 it was reported that liquidations cost the SA economy R80bn (?) per annum. The 18billion (?) per annum liquidation industry receives between 1300 and 1600 appointments per year. There are 4 000 (?) liquidators in SA. Liquidation is big business compared to the turnaround industry.

Note: the (?) figures come from various press reports and have not been verified.

The liquidation industry has been receiving harsh criticism from both the press and government.

It is being accused of corruption, slow on BEE, in collusion with banks, incentivised by a lucrative liquidation fee structure, and therefore more intent on finalising the liquidation than with rescuing a company.

An overhaul of the sector is overdue.

In terms of the Insolvency Act, liquidators receive fixed fees, regardless of how long it takes to wind up a company.

They receive 10% of the gross proceeds of movable property sold, 3% of any immovable property or shares, and 6% on continuing business.

This means big fees can accrue when the bankrupt business is large, or where the winding up process is simple.

Government is of the opinion that the liquidation industry should give way to the national interests of job preservation and business rescue "and not merely to those of liquidators, secured creditors and their lawyers".

To this end, a ministerial committee of enquiry into the sector, instigated by justice minister Brigitte Mabandla, kicked off on 24th August 2004 (see box on the right). The commission will also look at black empowerment for the sector.